What Is Martha Stewart Unethical

In this case, there are several conspirators who is involved in the fraud receiving punishment from either SEC or federal government. Robert Levin, the AMRE executive and major stockholder, and Dennie D.Brown, the company’s chief accounting officer, were subject to the punishment in the form of a huge amount of fine by the SEC and the federal government. This punishment came from reasons. After AMRE going public, the company have the obligation to publish its financial reports but its performance did not meet expectation. The investigation by SEC shows that Robert took the first step of this scam, fearing the sharp drop of AMRE’s stock price because of the poor performance of company. He abetted Brown, to practice three main schemes to present a false appearance of profitable and pleasant financial reports. Firstly, they instructed Walter W.Richardson, the company’s vice president of data processing, to enter fictitious unset leads in the lead bank and they originally deferred the advertising cost mutiplying “cost per lead” and “unset leads” amount, so that they deferred a portion of its advertising costs in an asset account. The capitalizing of advertising expenses allowed them to inflate the net income for the first quarter of fiscal 1988. Secondly, at the end of the third and fourth quarters of fiscal 1988, they added fictitious inventory to AMRE’s ending inventory records, and prepared bogus inventory count sheets for the auditors. Thirdly, they overstated the percentage

Martha Stewart is an American Home decorator Icon surrounded by accusations of Inside trading, Obstruction of justice, False statements and Conspiracy. Her trial and investigation lasted for two years ending with her being found guilty of charges and convicted to spend time in jail, home arrest and probation. In this work I will expose Martha Stewart’s behavior and why her actions were considered outlaw, unethical and unprofessional. I will also explain which ethical behavior she used and how that affects her image, financial status, social position, fame and followers.

Jordan Belfort is the notorious 1990’s stockbroker who saw himself earning fifty million dollars a year operating a penny stock boiler room from his Stratton Oakmont, Inc. brokerage firm. Corrupted by drugs, money, and sex he went from being an innocent twenty – two year old on the fringe of a new life to manipulating the system in his infamous “pump and dump” scheme. As a stock swindler, he would motivate his young brokers through insane presentations to rile them up as they defrauded investors with duplicitous stock sales. Toward the end of this debauchery tale he was convicted for securities fraud and money laundering for which he was sentenced to twenty – two months in prison as well as recompensing two – hundred million in

It is easy to understand Solomon’s argument that unethical practices destroy the business and its key people. This has been proven by so many companies, such as Enron case, whose scandals have been unveiled to the public and the people who used to amass great wealth out of unethical practices are now behind bars. Even if they get out of prison, it will be difficult to imagine how they can recover from the negative image that the public already has on them.

Overview of the Case: The Securities and Exchange Commission claims Mark D. Begelman misused proprietary information regarding the merger of Bluegreen Corporation with BFC Financial Corporation. Mr. Begelman allegedly learned of the acquisition through a network of professional connections known as the World Presidents’ Organization (Maglich). Members of this organization freely share non-public business information with other members in confidence; however, Mr. Begelman allegedly did not abide by the organization’s mandate of secrecy and leveraged private information into a lucrative security transaction. As stated in the summary of the case by the SEC, “Mark D. Begelman, a member of the World Presidents’ Organization (“WPO”), abused

SEC alleged that Mark Cuban violated misappropriate insider trading. To be qualified as misappropriate insider trading, an individual wrongfully obtains (misappropriates) inside information and trades on it for her or his personal benefit. In this case, Cuban actually traded his shares based on the material inside information he was told and saved him $750,000 in losses. Wrongful misappropriation means violation of a fiduciary duty.

The charges included conspiracy, money laundering, obstruction of justice and perjury (Johnson & Johnson, 2005, p. 37).

December 11th, 2008 started out like an average work day for Eleanor Squillari, secretary for Mr. Bernie Madoff, at Bernard L. Madoff Investment Securities. After reaching her desk she received a call from Ruth Madoff, who sounded rather lifeless instead of her usually upbeat self. Ruth was inquiring whether her sons had made it into the office; Eleanor informed her that they hadn’t, while in the back of her mind she kept thinking about Ruth’s strange voice. However, she didn’t question it but continued her day, going on her regular rounds. As she descended to floor 18 she observed that the conference room was full of serious men is suits, all surrounding Peter Madoff, Bernie’s bother. “Strange,” she noted, along with why Bernie still hadn’t shown up. She was interrupted by a big man in a trench coat walking in her direction, but she questioned him first. He responded by flashing his badge and yelling “F.B.I!” “What’s happening? Was someone kidnapped? ” she didn’t know where to start, but her confusion was resolved when Peter 's secretary walked over. Looking stunned, she said "They 're saying that Bernie was arrested for fraud." “No, that’s not true!” Eleanor replied, but Peter walked by and reaffirmed it. She was shocked; for twenty years she never noticed anything about the international White Collar crime that was run right under her nose (Seal, Squillari).

The word “fraud” was magnified in the business world around the end of 2001 and the beginning of 2002. No one had seen anything like it. Enron, one of the country’s largest energy companies, went bankrupt and took down with it Arthur Andersen, one of the five largest audit and accounting firms in the world. Enron was followed by other accounting scandals such as WorldCom, Tyco, Freddie Mac, and HealthSouth, yet Enron will always be remembered as one of the worst corporate accounting scandals of all time. Enron’s collapse was brought upon by the greed of its corporate hierarchy and how it preyed upon its faithful stockholders and employees who invested so much of their time and money into the company. Enron seemed to portray that the goal of corporate America was to drive up stock prices and get to the peak of the financial mountain by any means necessary. The “Conspiracy of Fools” is a tale of power, crony capitalism, and company greed that lead Enron down the dark road of corporate America.

Between the years 2000 and 2002 there were over a dozen corporate scandals involving unethical corporate governance practices. The allegations ranged from faulty revenue reporting and falsifying financial records, to the shredding and destruction of financial documents (Patsuris, 2002). Most notably, are the cases involving Enron and Arthur Andersen. The allegations of the Enron scandal went public in October 2001. They included, hiding debt and boosting profits to the tune of more than one billion dollars. They were also accused of bribing foreign governments to win contacts and manipulating both the California and Texas power markets (Patsuris, 2002). Following these allegations, Arthur Andersen was investigated for, allegedly,

When Ms. Stewart found out about the investigation, her first instinct was to lie and try to cover up the fact that her broker gave her before hand knowledge about the soon to be falling Imclone stocks. I believe this case and investigation was tried out in the media

Arnold McClellan and Annabel McClellan were charged by the Securities and Exchange Commission with leaking confidential merger and acquisition information to their family overseas. The SEC claimed it was a multi-million dollar insider trading scheme. Mr. McClelland had worked in advising his clients in mergers and acquisitions for over a decade. Because of his position as the head of one of Deloitte’s regional mergers and acquisitions team, Arnold McClellan had access to highly confidential information.

The Martha Stewart insider trading case was a high profile case filled with uncertainty. In order to say whether or not Stewart handled her indictment responsibly, it is necessary to start with an assumption regarding her guilt or innocence. For the purposes of this paper, based on the information I have read about the case, and based on the fact that she was found guilty of all counts (although not all specifications) in her stock conspiracy trial (with the exception of the security fraud charge which was thrown out), I will assume that she is guilty. (courttv.com) Based on that assumption, there are several reasons that Martha Stewart did not handle her indictment responsibly which can be

in 2003, investigators found that HealthSouth management had overstated earnings by at least $2.7 billion over a 17-year period. Furthermore, before the scheme was exposed, members of senior management had been quietly selling their shares as quickly as they dared and falsely reporting that HealthSouth had billions of dollars in existing assets. In August 2002, the then CEO and Chairman Richard Scrushy sold $75 million worth of his company shares just weeks ahead of HealthSouth announcing that cuts in Medicare reimbursements would reduce its pre-tax profits by $175 million. The company also said it wouldn’t issue earnings guidance for the remainder of 2002. HealthSouth’s share value immediately tumbled from $11.97 to $6.71 (HealthSouth 2002, Appendix 1). With top-tiers selling their shares and the resultant rapid and precipitous drop in the company’s share value, attracted the SEC’s attention to investigate these occurrences. The company’s insiders told SEC that the Medicare payment reduction actually was $20 million at most, and that management was using the additional $155 million in supposed reimbursement cuts to make up for reported earnings that never existed (HealthSouth 2002, Appendix 1)

The problem to be investigated was the outcome of the ethical dilemma that occurred within the business circle leading to the violation of financial regulations and consequently eroded the confidence of shareholders on the U.S capital market. Examples of the violation of financial regulations were Enron, WorldCom and Lehman Brothers scandals that led to the collapse of the three companies. To restore the public confidence of the U.S capital market, the Senate intervened by passing the SOX (Sarbanes Oxley) Act of 2002 or Investor Confidence Act. In the Section 4.11 of the case, there are issues and activities covered by SOX that could have been handled as ethical and resolved voluntarily.